AT LEAST two public sector banks, Bank of Baroda and Bank of India, have accepted that their branch staff deposited Re 1 on their own in Jan Dhan accounts to apparently reduce the number of zero-balance accounts opened under the government’s flagship financial inclusion scheme. Some other banks have admitted to “mobilising” money in accounts through their correspondents, while others have assured of “corrective action,” tighter vigil and “strict” advice.
These bank responses were sent to the Government after it sought a clarification from them following The Indian Express investigation (September 13, 2016) that revealed how officials were making Re 1 deposits, many from their own allowances, some from money kept aside for office maintenance, to reduce the branch’s tally of zero-balance accounts. Indeed, the number of zero-balance accounts fell, from 76% in September 2014 to almost 46% in August 2015 and 24.35% on August 31, 2016.
The Indian Express has now accessed, under the RTI Act, a statement prepared by the DFS on September 27, 2016, for the Prime Minister’s Office based on the banks’ responses.
Its key observations and findings:
# Of the 23.4 crore Jan Dhan accounts in 27 public sector banks, including the Bharatiya Mahila Bank, up to September 13, 2016, at least 1.2 crore show a balance of merely Re 1 as the only transaction. This accounts for over 5.15 per cent of the total Jan Dhan accounts opened in these banks.
# Says a noting by a joint secretary of the DFS on September 27: “It is pertinent to mention here that in few of the cases of Bank of Baroda and Bank of India, deposit of Re 1 has been done which has been accepted by the banks concerned. Action needs to be taken as deemed fit in these cases so that in future such incidents are not repeated.”
The DFS statement to the PMO states: “Bank of Baroda has informed that 2 per cent of PMJDY (Pradhan Mantri Jan Dhan Yojana) accounts have received Re 1 from P&L (Profit & Loss) Account. There are some cases in Bank of India where amount was transferred from BCs’ (banking correspondents) account.”
These are the individual responses from various banks, obtained under the RTI Act:
ALLAHABAD BANK: On December 31, 2015, there were 3.69 lakh Jan Dhan accounts with Re 1 balance, which dipped to 3.22 lakh on September 14, 2016. “These accounts were opened in camp mode through various representatives like social bodies, village pradhan, NGOs, etc. Amount in these accounts were deposited by these representatives through the branch as these accounts were mobilised by them,” the bank stated.
ANDHRA BANK: 2.28 lakh of 22.27 lakh Jan Dhan accounts had a balance of Re 1, and no other transaction. “No such instances are reported in our bank regarding utilisation of funds from various expenditure heads available in branches for activation of zero-balance accounts,” the bank said.
BANK OF BARODA: A sample verification of 3,799 Jan Dhan accounts covering 100 branches in Bihar, MP, Rajasthan, Chhattisgarh and UP were conducted. In eight per cent of these accounts, deposits were done “by a single cash deposit”. In two per cent of these accounts, cash was deposited “by debiting P&L accounts”. “We sincerely regret the occurrence of this anomaly and shall ensure that suitable corrective action is taken,” the bank stated.
BANK OF INDIA: 18.03 lakh of 1.42 crore Jan Dhan accounts had a balance of Re 1. “However, 13.17 lakh accounts are funded by BC (banking correspondents) to keep the account active,” said the bank, adding that it would “take all necessary steps to stop such practice in future”.
CORPORATION BANK: 23,056 of 5.23 lakh Jan Dhan accounts had a balance of Re 1, and no other transaction. But on the issue of officials or banking correspondents depositing money in these accounts, the bank said, “We have not come across such types (of) instances.”
PUNJAB NATIONAL BANK: “Deposits have been made by customers themselves or through BC agents… Appropriate action will be taken in the matter,” the bank stated.
PUNJAB & SIND BANK: Around 18 per cent of its Jan Dhan accounts had a balance of Re 1. “We have sought urgent detailed reports on the concerns raised therein from all zonal managers,” it said.
STATE BANK OF BIKANER AND JAIPUR: 77,974 of 59.27 lakh Jan Dhan accounts had a balance of Re 1, with no other transaction. The bank said it has advised BCs to “mobilise deposits in their customer accounts to minimise zero balance”.
STATE BANK OF INDIA: 6.62 lakh of 6.69 crore Jan Dhan accounts had a balance of Re 1, without any other transaction. The bank denied issuing any instruction for “wrongful reduction” of zero balance accounts.
SYNDICATE BANK: 2.34 per cent of total Jan Dhan accounts had Re 1 as balance with no other transaction. The bank stated that it will undertake a “micro analysis of these accounts and take the required remedial steps wherever required, if any unethical practice are found”.
UCO BANK: 74,635 of 74.64 lakh Jan Dhan accounts had Re 1 as balance. One of the reasons for these Re 1 deposits, the bank said, was “testing of transactions done by Bank Mitras at the time of opening of account.” The bank has promised to take “all necessary steps to restrict possibilities of occurrence”.
VIJAYA BANK: 1.32 lakh accounts with Re 1 balance. The bank said it has “strictly advised” its field officials “not to resort to such practices for the purpose of funding these accounts”.
THE ONE-RUPEE COUNT
Percentage of Jan Dhan accounts with Re 1 balance as of September 13, 2016:
Bank of India: 10.31%
Canara Bank: 7.88%
Central Bank of India: 13.71%
Punjab & Sind Bank: 17.71%
Punjab National Bank: 20.73%
Andhra Bank: 10.24%
Union Bank of India: 10.28%
Vijaya Bank: 9.37%
Source: Department of Financial Services, obtained under the RTI Act